Markets brace for quiet spell ahead of US Data deluge

By Farah Mourad | 14 March 2024

Market open
  • Mixed performance seen in Wall Street indices yesterday

  • Speculated shifts in Bank of Japan's monetary policy

  • Gold's direction may be influenced by shifts in Bank of Japan's policy

Stock Market

In yesterday's trading session, Wall Street indices closed with a mixed performance, with the S&P 500 and Dow Jones edging higher while the Nasdaq declined due to challenges faced by major tech companies, notably Tesla and Nvidia. Across Asia, the Nikkei, Kospi, and Nifty 50 indices saw gains, contrasting with Chinese indices which traded lower. European markets are poised for a slightly lower opening.

Dollar VS Yen

Meanwhile, the US dollar has maintained relative stability this week, with USD/JPY hovering around 147.90. Attention is drawn to Japan, where the UA Zensen announced significant pay hikes, coinciding with reports of the Bank of Japan potentially ending negative interest rates. However, traders remain cautious about a hawkish stance from the BoJ at next week's meeting. In currency markets, the US dollar and New Zealand dollar are performing well, while the Japanese yen is weaker.

How would the Yen effect Gold

Gold may be influenced by the speculated shift in the Bank of Japan's monetary policy stance, alongside expectations of imminent rate cuts by the Federal Reserve. This could impact carry trades involving the yen and the dollar, potentially affecting market dynamics. Concerns arise about global financial stability, particularly regarding a potential repatriation of funds from U.S. bonds to Japan, which could have ripple effects across various asset classes, supporting gold, as investors adjust their portfolios in response to changing interest rate differentials and risk appetites.

Today's data

Today, European trading is expected to be subdued as traders await US data releases, including retail sales, PPI, and weekly jobless claims. This anticipation may result in muted trading activity until the data is unveiled.